PS1: Social and Environmental Assessment and Management Systems:
Dishman places a high priority on quality, health and safety, and environmental management. At the corporate level, Dishman has a Quality, Health, Safety and Environment (QHSE) Policy that applies to all its sites in India. The QHSE Policy is distributed to all employees, including contractors, and is displayed in numerous locations at the plants and headquarters office. The Bavla site and the Naroda sites are certified for ISO 9001 (Quality), 14001 (Environmental) and 18001 (Occupational Health and Safety). The Bavla site was approved by the US Food and Drug Administration (USFDA) in 2006, and Dishman is in the process of seeking USFDA approval for the Naroda site.
Dishman has a Vice President for Safety, Health and Environment (SHE) and Integrated Management System, reporting directly to the Managing Director. SHE staff are in place at each of Dishman’s plants in India, including a Senior Environmental and a Senior Safety Officer, each with a number of junior staff. The total number of SHE staff at Bavla site is 75, and at Naroda is 35.
A QHSE Manual, System Controls and Standard Operating Procedures exist at each site in India, which provide a framework and procedures for management and monitoring of relevant issues. Operating procedures are available on site in both English and Gujarati languages. Safety signage is also abundant throughout each site.
Dishman undertakes both internal and external safety and environmental audits of it Bavla and Naroda plants, and is also audited by many of its customers, including reputed multi-national pharmaceutical companies. Internal Safety Audits are undertaken on a six-monthly basis by an interdisciplinary team. Any deficiencies are noted and passed on to the concerned department for response. An external consultant undertakes safety audits annually, including review of progress against internal audit actions. Safety staff are responsible for noting daily safety observations.
Environmental audits are included within the six-monthly Safety Audits, although the team has not always included a representative of the environment team on site. Dishman has recently revised the relevant operating procedures to ensure environment team representation on the safety auditing team.
Environment staff on each site undertakes monthly emissions monitoring. A government-approved external agency undertakes an annual environmental audit, the results of which are submitted to the Gujarat Pollution Control Board (GPCB) annually. To date, no non-compliance with Indian norms have been noted during annual audits.
In relation to financing from FMO of the Netherlands, Dishman undertook an external social audit as a one time event in 2006. The Company has noted the recommendations and is tracking follow-up action (see more details under PS2: Labor and Working Conditions).
An external energy audit has been undertaken and recommendations for energy saving opportunities have been implemented.
Dishman is currently constructing a High Potency drug facility that will have all its own independent environmental management systems, including ETP and incinerator. Dishman will review its QHSE manual for Bavla and ensure that environmental, health and safety aspects of on-going and/or upcoming construction activity is adequately identified and managed.
Given the expansion planned under the project, both within India and internationally, Dishman has committed to develop and implement a QHSE policy that covers all of its worldwide operations, and to develop a consistent QHSE system at each operating facility worldwide which meets all relevant legal and IFC requirements. In addition, Dishman will seek ISO 14001 and 9001 certification for each new operating facility within 12 months of commissioning each new facility.
Dishman undertook a comprehensive Environmental Impact Assessment prior to beginning construction of the plant in China. The EIA was undertaken in line with government regulations and an environmental permit was issued in mid-2006. An SHE supervisor is on site during the construction, reporting to the Dishman Project Manager for the plant site. In addition, the construction contractor has a designated SHE team.
During construction, Dishman holds weekly site safety meetings and is subject to regular environmental and safety inspections from the authorities.
PS2: Labor and Working Conditions:
Dishman currently employs over 830 people. They employ a further 1000 people via contractors on their sites who provide security, maintenance, housekeeping and catering services, among others. Approximately 10% of the staff is women, mostly employed in the head offices or laboratories.
Dishman manages its labor relations in accordance with relevant Indian regulations. The Company has individual 24 Human Resources policies, including Recruitment and Selection Policy, Separation and Exit Policy, etc. These policies are available on the Dishman intranet to all Dishman employees and are covered in new employee inductions/orientations. The policies that are a reflection of Indian law -- non-employment of Child Labor, for example -- are passed on to contractors via clauses in their contracts. The Dishman HR policies do not apply to contractors and contractor staff, although occupational health and safety, and workplace requirements, apply to Dishman staff as well as contractors on site. .
Dishman is developing a Performance Management System for its staff and will implement this for all its employees over the coming months.
Both the Bavla and Naroda plants have Occupational Health Centers and full-time doctors or nurses on site. Employees, including contractors’ employees, are given a pre-employment medical check-up and annual check-ups for every year of employment. Employees, including contractors’ employees, have access to the health centers for treatment of minor illnesses or any work related injuries.
Dishman employees are covered under a group medical policy and a group personal accident policy.
Dishman has a policy on Non-employment of Child Labor. The age of employees and workers, including contractors, is checked by the appropriate party prior to hiring. Employee badges are checked daily at the gate when each employee enters and Security check the official identification of any employee he suspects may be under the age of 18. In addition, the site-based HR team undertakes “spot checks” of identification at the gates twice each month to ensure compliance with the non-employment of child labor policy.
In relation to financing from the international development bank of the Netherlands (FMO), Dishman under took an external social audit in 2006. The audit addressed both worker and labor relations issues, and community relations issues. The audit found no instances of child labor, no instances of forced labor, and no major complaints from employees, including contractors.
The audit did note that, although there were no unions in place, the Company had taken no actions to discourage freedom of association. The audit also noted that there was no worker complaint procedure in place, HR record keeping needed improvement, and monitoring of contractors against social performance expectations needed improvement, among other minor issues. Dishman has put an action plan in place to respond to the audit findings, but has not completed all actions. Dishman will review the audit findings, along with the requirements outlined in PS2, and will revise HR policies and procedures to ensure compliance wit PS2 and the recommendations of the 2006 audit. In addition, in response to the Company’s expected growth, the HR department will develop and implement a corporate level set of HR policies that will cover its worldwide operations, and will develop a consistent system at each operating facility worldwide, which meets all relevant legal and IFC requirements.
Dishman has a management safety committed in addition to Work Safety Committees (WSC) on each of its sites in India, representing all levels of workers and contractors, WSCs meet once every two months to review safety performance and Management Review Meetings are held every six months. Dishman SHE team meets with each contractor providing services on site on a monthly basis to discuss safety issues. In addition, Dishman undertakes numerous safety related activities with its employees and contractors, including drawing competitions, for example, in order to increase worker safety awareness. Dishman has a procedure for observation of safe practices. Behavior based safety reports are prepared and improvements are undertaken through personal counseling, demonstration, training at the workplace.
Dishman has a safety training system that tracks safety induction training for all employees, as well as specialized training for certain individuals. Each shift includes 4 specially trained fire safety wardens. Outside expertise is hired for safety training as needed.
Dishman has a Permit to Work system which addresses high risk work, as well as a design modification procedure. Accidents are investigated and analyzed to learn lessons, accident feedback reports are completed and sent to the relevant Head of Department for review and/or action. New activities and plan modifications are subject to a risk assessment, including environmental and safety risks. Based on observations during the appraisal, Dishman will review its plant modification procedure to improve the sign-off procedure so that SHE implications of all design changes, including minor ones, are adequately assessed.
Appropriate Personal Protective Equipment (PPE) is issued to each employee, including contractors. Security personnel do not allow workers to enter the site if they do not have their PPE. Signage indicating required PPE for each area of the plant is displayed. Based on observations during the appraisal, Dishman will continue to be vigilant with requiring PPE, in accordance with their operating procedures. Dishman will also review its SHE induction program to ensure all visitors to sites are adequately briefed.
Industrial Hygiene surveys are carried out which address workplace noise, illumination, heat stress, ergonomics and effectiveness of local exhaust ventilation.
PS3: Pollution Prevention and Abatement:
Dishman has an established environmental monitoring program that includes monitoring of effluent and stack emissions for the plants in India. Monitoring records reviewed during appraisal indicate material compliance with Indian regulations. Dishman has agreed to review IFC guidelines for pharmaceuticals industry and ensure that all emissions are in line with IFC requirements or regulations of the concerned government authority, whichever is more stringent.
Both plants have effluent treatment plants on site. The Bavla site is a “zero discharge” site. The ETP capacity is 500m3 while the actual load is 165m3. Process effluent is captured in one of two holding tanks, depending on the level of COD. Low COD (less than 10,000 mg/ltr) effluent is treated through aeration, clarification, sand filter and reverse osmosis. Treated effluent is used for irrigation on the plant site. Sludge, removed after aeration and clarification, is pressed into cake and disposed of in government-approved landfill, after testing as required by government. Sludge remaining after reverse osmosis is dried and the solid waste of approximately 7 mt/month is disposed of in one of 4 on-site incinerators. At Naroda, the typical daily effluent load is 12 kl/day. There is an ETP at the site, with treated effluent disposed of in the common industrial park system. ETP sludge is disposed of at a government approved landfill.
Effluent that is high COD, solvents and chemical solid waste is disposed of via incineration on site.
Hazardous waste, such as oily waste or spent filters, is segregated and stored in bunded areas at both sites and are then incinerated on site. Dishman also has access to a government approved common incinerator at the Naroda site if the need arises.
Each plant unit has a solvent recovery unit. Much of the solvent is re-used. The remainder is either sold to third parties, depending on whether it meets minimum purity standards, or disposed of via incineration.
Both sites run on power supplied by the grid. Back-up generators at Bavla are used less than 6 hours per month, on average. Generators at Naroda are used 6-8 hours per week, on average. Stack emissions are monitored when generators are in use.
Chemicals are delivered in drums or in tankers to the Bavla site and to a warehouse approximately 1 km from the Naroda site. At Bavla, the trucks are provided by third party contractors. At Naroda, chemicals are delivered to the warehouse by third party contractors, and then transported from the warehouse to the Naroda site by Dishman-owned trucks. Security guards fill out a check list prior to letting any truck on site, which covers material being transported, nature of chemicals (hazardous or non-hazardous), drivers permit to transport hazardous chemicals, MSDS, and availability of Transport Emergency card. Security guards have been provided training on this process, and have hazardous chemical warning lists available in their offices. This allows Dishman to turn back any trucks that are not properly licensed, which reportedly happens only once in a month on average. In addition, laboratory staff check each delivery to confirm chemical content prior to unloading the delivery.
In the case where finished products have a hazardous nature, Dishman ensures that drivers have Transport Emergency Cards and MSDS, and that each drum is appropriately labeled.
Potable water is extracted from a borehole on site at Bavla and at Naroda water is supplied by Gujarat Industrial Development Corporation, a corporation established by the Government of Gujarat for promotion and development of industry in the state.
No environmental incidents have been reported from the construction site in China.
PS4: Community Health, Safety and Security:
Dishman has been awarded a number of safety and environmental awards from the British Safety Council Service (2004), National Safety Council of India (2005, 2006, 2007) Greentech Safety Award from Greentech Foundation (2004, 2005, 2006, 2007) and Gujarat Safety Council (2003, 2004, 2005, 2006,). Dishman has had no reportable injuries (an injury that required a hospital stay of 48 hours or more) in 6 years.
In 2006, there was a fire in the warehouse at the Bavla site. A detailed incident investigation was undertaken and an action plan was put in place to respond to the findings of the investigations. Among other actions, Dishman installed automatic water sprinkler system and foam sprinkler system, CO2 flooding system in oxidizing room, additional fire doors, and a separate warehouse facility for Research and Development department. In addition, increased fire safety training was developed and continues to be implemented as part of Dishman’s operating procedures.
Dishman has Emergency Response Plans for both the Bavla and Naroda sites which are reviewed annually at a minimum by Dishman management, and which are submitted to the local government for approval. Dishman has a continuous monitoring system for toxic and flammable gas at Bavla site and stores chemicals in separate rooms with individual fire safety system depending on the nature of the chemical (corrosive, flammable, oxidizing, water reactive, etc.). Dishman also has a Mutual Aide Memorandum of Understanding with nearby industries at both Bavla and Naroda sites, which provides for mutual assistance in the case of an emergency.
Security at both sites is provided by a third party contractor. None of the security personnel are armed.
PS5: Land Acquisition:
Dishman Infrastructure Ltd, (DIL) was promoted by Dishman Pharmaceuticals and Chemicals Ltd, with seed capital of INR 500,000. DIL is currently a wholly owned subsidiary of Dishman, although Dishman will hold only a small percentage of shareholding in DIL in future, as Dishman will concentrate on its core business of pharmaceuticals and chemicals.
DIL has acquired 158 hectares of land approximately 50 km from Ahmedabad (17 km from the Bavla town on National Highway No 8, leading to Kandla Port) with the intention of establishing a Special Economic Zone. The funding for the purchase of land was made available by the promoters of Dishman Group in their personal capacity. The current project does not envisage expansion of Dishman Pharmaceuticals into the SEZ..
One-hundred and fifty eight hectares of land has been acquired to date, comprising 70 plots. All transactions were undertaken on a willing seller-willing buyer basis, with a price agreed through negotiation. Some plots that DIL intended to purchase have not been purchased because the parties have not agreed on a price. The land is degraded farm land and has not been used for growing crops in recent years. No disputes over land purchase were reported. Sale agreements are written in local (Gujarati) language.
Land for the facility in China is located within the Shanghai Chemical Industrial Park. Because the land for the industrial park was re-claimed from the sea, there were no former land owners or users on this site, nor are there any nearby villages.
Land for the facility in Saudi Arabia is government owned land and has been allocated to Dishman on a long-term lease. The government-owned land is an industrial area had no previous landowners or users.
Dishman has confirmed that they will review and comply with the requirements of PS5 in the case of future land acquisition related to the project.
